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Which will Dieselgate hurt more, Volkswagen or US diesels?

The most damning response to the news Volkswagen skirted emissions regulations for its diesel models may have actually come from the Los Angeles Times. On Saturday, the Times published an editorial titled "Did Volkswagen cheat?" The answer was undoubtedly yes. When you can't drive down Santa Monica Boulevard without seeing an average of one VW TDI per block, the following words are pretty striking: "... Americans should be outraged at the company's cynical and deliberate efforts to violate one of this country's most important environmental laws." VW has successfully cultivated a strong, environmentally conscious reputation for its TDI Clean Diesel technology, especially in states where emissions are strictly controlled. A statement like that is like blood all over the opinion section of the Sunday paper. The effect on VW's business, even Germany's financial health, was already felt Monday when the company's shares plummeted 23 percent in morning trading. The statement on Sunday from VW CEO Dr. Martin Winterkorn says "trust" three times. That probably wasn't enough in nine sentences. Writers over the weekend have compared VW's crisis to one at General Motors 30 years ago, when it was the largest seller of diesel-powered passenger cars until warranty claims over an inadequate design and ill-informed technicians effectively pulled the plug on the technology at GM. In a sense, VW is in the same boat as GM because it has fired a huge blow into its own reputation and that of diesels in passenger cars. And just as automakers like Jaguar Land Rover, BMW and, ironically, GM, were getting comfortable with it again in the US. VW of America was already knee-deep in its other problems this year. Its core Jetta and Passat models are aging and it needs to wait more than a year for competitive SUVs that American buyers want. The TDIs were the only continuous bright spot in the line and on the sales charts. Even as fuel prices fell and buyers shunned hybrids, VW managed to succeed with diesels and show that Americans actually care about and accept the technology again. Fervent TDI supporters might actually lobby for that maximum $18 billion fine to VW. I've personally convinced a number of people to look at a TDI instead of a hybrid. Perhaps not so much for stop-and-go traffic, but I know buyers who liked the idea that a TDI drove like a normal car and wasn't packed with batteries.

Everyone but VW and Tesla has recalled their Takata airbags

Takata's massive airbag inflator recall affected over 32 million vehicles from 11 automakers in the US, but two companies buying the supplier's parts haven't been affected so far: Volkswagen and Tesla. There are 887,055 VWs and 184,926 Teslas using Takata's inflators with ammonium-nitrate propellant, a new accounting shows, according to Automotive News. That doesn't necessarily mean the models need to be recalled. These figures came from a report that Takata prepared for the National Highway Traffic Safety Administration, which listed all of the vehicles it supplied with ammonium nitrate-fueled inflators. The substance is believed to be linked with the components' rupturing, along with manufacturing defects and humidity. "We're not asking because we've got reports of problems; we just need to figure out what the universe is," NHTSA spokesman Gordon Trowbridge said to Automotive News. Takata reportedly told Tesla that the inflators in its EVs are not affected with these problems, and VW is investigating a case in June where a side airbag allegedly burst in a 2015 Tiguan, Automotive News reports. The government is also still researching the precise cause of the parts' ruptures. If the investigation finds ammonium nitrate to be a factor, the vehicles could need recalled. During a Congressional hearing Takata vice president Kevin Kennedy admitted that ammonium nitrate could be among the factors of the ruptures, but the company has continued to use the chemical in its inflators. Takata is now working to transition to a different propellant. Related Video:

Volkswagen is not cool with a Fiat Chrysler merger

Volkswagen CEO Matthias Mueller shot down Fiat Chrysler CEO Sergio Marchionne's overtures for a merger in blunt fashion this week. Mueller told Reuters at the Geneva Motor Show, "We are not ready for talks about anything ... we have other problems. I haven't seen Marchionne for months." The unusually candid – and icy – response from one chief executive to another comes after Marchionne similarly pursued General Motors (again) this week. The FCA boss suggested GM might be looking for a new European partner as it prepares to unload its troubled Opel and Vauxhall divisions to PSA. A GM spokesman told USA Today that the company is not interested. Marchionne has been openly suggesting a GM merger since at least 2015, despite GM never reciprocating interest. VW's "other problems," as Mueller notes, include legal proceedings, fines, recalls, and other issues related to its long-running diesel scandal. Marchionne has long sought industry consolidation, arguing that automakers don't get a proper return on their investments in technologies, some of which are relatively similar. He's suggested sharing chassis and powertrain components could be a benefit to the collective auto sector. Skeptics argue FCA, which is smaller than GM, VW, Toyota, and others, needs a partner to survive, while its rivals already have the necessary scale to remain competitive. Related Video: